Syrah says Mozambique project’s costs rise

ASX-listed graphite developer Syrah Resources expects its Balama graphite project, in Mozambique, to cost $8-million more than previously estimated, owing to changes to the final design.

The costs of the Balama project, which would be commissioned in the second quarter of this year, had increased from $185-million to $193-million, the company told shareholders on Monday.

Changes to the final detailed design included concrete, structural steel and plate work, as well as associated engineering, freight and structural mechanical and piping installation costs.

During the three months to December, Syrah spent $32.6-million on the project, bringing total project development costs to date, to $113-million. An additional $37.6-million will be spent by the end of the current quarter.

A 2015 feasibility study estimated that during the first ten years of operation, the mine will produce at an average rate of 365 000 t/y graphite concentrate and deliver a free cash flow of $160-million a year.